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nonsense - brasil probs begin w their childlike belief in che ..and more specifically..jurassic labor laws, extreme meddling in cap market flows, corruption as a way of life, ease of doing business, toilet level productivity - Brasil does compete well with 3rd world contries and other complete basket cases but has nothing to do with PT and everything to do with Cardoso and world credit expansion - Brazil business policies shot themselves in the foot and kept on shooting - the real was 1.65 a a while back ..and they thought that a bad thing w a 25% export GDP

Dude!! maybe I missed something to be read between line, so you should be explicit about it: OPEN BRAZIL'S ECONOMY TO THE WORLD AND LET IT FACE COMPETITION.
That should cause some pain but if done progressively and rationally this can be minimized. It would also kip inflation at bay and increase competitiveness (particularly in manufacturing)

There is some lack of understanding in relation to the profiling of the Brazilian entrepreneur. The importance of credit policies through development banks is exceptionally important in the potential recovery of the Brazilian economy. The small and micro firms have an immense difficulty in obtaining the so called easy credit, due to (in a majority of the cases) their weaknesses in technical manners, as in doing economic viability studies for projects and accounting management. Witch results in a middle class that just simply is unable to increase its production capacity.
Brazil's slow improvement/investment in it's production capability is also the real villain behind rising inflation, so a reduction public banks credit would not contribute in any way to solving this problem.
At the same time, a looser monetary policy would imply in taking a risk, regarding inertial inflation, that remains an extremely fresh memory in the Brazilian population, something I believe, no candidate is willing to risk bringing back.
Nevertheless, it is a fact that Brazil's due a huge progressive fiscal reform, witch will allow the country so star solving its deficit problems. Today there is a $250 billion dollars flux that is compromised paying off the interest for the country's debt. Meanwhile, one of the most popular government programs, Bolsa Família, cost only $25 billion dollars.
The importance of this year's presidential election is the real highlight here. Whether Brazil becomes an economic example for Latin America countries and the big B among the BRICS, is going to be decided on witch path it takes.

This is a short-sighted view on Brazil's economic outlook. It is true that inflation is expected to hit 6.3% over this year, but lowering that through increased sovereign bonds interest rates won't accomplish its objective in the short run and will also prejudice GDP output - therefore leading to a stagflation. The proposed loose monetary policy fails to see the main macroeconomic problem Brazil will face over the next years: the lack of investment due to both low expectations and overloaded infrastructure.
For the first one current government tries to increase wages and promote income transfers to foster consumption. This, unfortunately, is increasing inflation since the markets are still holding back investments.
The latter has been addressed by a series of state funded infrastructure on roadways, railways, ports and airports which accounts for US$ 200 B.
The current scenario will keep pushing inflation to its level of 6% in the short run, though the actions on infrastructure may be enough to boost demand expectations and lower prices in the coming years to some extent.
Apart from that, the mentioned government actions do not target one of the biggest problems in Brazilian economy: taxation. It's not high as this article suggests - it hits an average number when compared to OECD - it's instead, highly regressive. Worse than that, it seems there is no political background to back up such bold move. Tighten the fiscal policy will not relieve the stressed GDP, in fact it will only harm the poor fraction of that society.
The suggestions on the credit part of this article does not state that Brazil is a champion in interest rate in private banking which conflicts directly to his last proposal. Changing our lending matrix to a private one will hurt Brazil’s much needed investments.
Of course there are a number of others factors – such as microeconomic policy - that add up in this outlook, but these are the ones I see as the most relevant in this context.

This could be easily predicted AFTER a world cup, despite the stimulus of lots of cash, because there is a sudden shock to employment and lots of people will rather set aside gains rather than invest stimulated/shocked dollars/reals into real activities. That is consistent with stagflation, but actually, I have no idea about the numbers.

The reason is that small business operators will not look at monetary stimulus of cash proceeds of the World Cup and forecast higher demand, rather, they will observe that the World Cup is over, and instead hold onto their cash and wait for investment opportunities to arise. This is a double whammy on employment. Meanwhile, people have cash chasing goods -> stagflation, maybe.

I don't see why this would have to be more than a blip from the long term perspective, however.

It certainly doesn't look good for Brazil right now, but I think Mr. Frieda overstate's his case somewhat. He provides a bunch of figures for the Brazilian economy, which are inarguably bad, but not damning. 7.5% inflation is not all that uncommon for middle-income countries, the current account deficit is growing, but still not as high as the US deficit was just a couple of years ago. Manufacturing has declined somewhat, but, again, that's not abnormal.

Mr. Frieda's policy advice is good general advice, but tighter fiscal policy at the cost of shoring up the tremendous gains made in poverty reduction is not a recipe for long-term success. China has shown that a loose monetary policy is not a prerequisite for a strong economy.
Mr. Frieda's policy recommendations sound a lot like neo-classical, Washington-Consensus era policies that have failed over and over.

Brazil certainly has an economic mess to deal with, but it's not the disaster Mr Frieda portrays.

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